Anyone about to go on maternity leave and currently using childcare vouchers, READ THIS. It could save you £2K!

[Jojay]

Did you know that if you stay in the scheme while on your maternity leave, employers are unable to take the £243 tax free deduction from SMP, and therefore must pick up the tab for this themselves?

This means that you will get £243 paid into your childcare vouchers account while you are on maternity leave - a significant amount!

This benefit is not well publicised by employers, and most encourage you to leave the scheme so that SMP calculations are unaffected, but the benefits of staying in the scheme are likey to far outweigh that.

Read this thread here

Happy days thanks for that Jo!..

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A friend told me about this recently, I was surprised too, thanks for publicising it. Am going on mat leave in August, not currently in the childcare voucher scheme, but seriously thinking about joining.

I need to look at how it might affect WTCs though. There's a good link to a HMRC calculator to help you work out whether claiming CVs (losing WTCs) will be worth it for you here. (Less of an issue for the bit employer pays, obviously!)

One question, if anyone can help - my year's maternity leave breaks into 18 weeks on full pay, 21 weeks on SMP, and 13 weeks unpaid. I would be making childcare voucher contributions during the first 18 weeks, then my employer would be during the 21 weeks when I'm just on SMP. But what about in that last 13 weeks, who covers them then, or are you forced to leave the scheme because it's 'unpaid leave'?

Really? I was told that I had to leave the scheme whilst on mat leave because they couldnt take the money out of my SMP

Puddock you are entitled to receive all your benefits including the vouchers throughout your maternity leave, regardless of whether you're receiving any kind of maternity pay at the time. Deductions can be made from occupational maternity pay, so yes for you in the first 18 weeks deductions will continue. Deductions can't be made from SMP and obviously can't be made when you are receiving no pay at all, but the vouchers must still be provided.

peppapig that was incorrect, are you still on mat leave at the moment? Was it your employer who told you you had to leave because they wouldn't be able to make deductions?

Bump

Thank you flowery
Seems like a no-brainer to join the scheme then...

They pay them for up to a year's maternity leave according to my employer.

Yes - though was a year ago now?

In fact I think they actually removed me from it rather than me leaving!

i think that's what they will do to me!

would i want to fight it? especially with a newborn? no, not really - I guess they know that and rely on that (or on the fact that people don't know the benefits of aruging to stay on the scheme)

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well I just wanted to update everybody. I had some communication with HR between my last message and this but didn't want to post as I was scared it woudl jeopordise my position!

received confirmation today that employer will be paying childcare vouchers for entire length of maternity leave and of course will not/can not deduct from SMP! YAY!

They are now looking into an occupational pay scheme (as of course vouchers can be deducted from that)

I am the first person to be in this position in the firm (my profession is not really family friendly)

They said the law has only recently changed and has not been tested, and they don't want to be the first to test it!

thanks so much to those who provided this advice I'm now about £3k better off!

Does anyone know what happens if you stop paying your nanny/childcare provider whilst on maternity leave? Do the vouchers stop or accrue in your account?

don't forget also that you are allowed to deduct £100 pw for every week of SMP from your final P60 figure for the purposes of CTC/WTC.

Gangle - if you are collecting electronic vouchers they will just accrue in your account - not sure if there is an expiry date - possible 1 year from issue?

oooh, really? So you don't lose them if you stop paying a childcare provider?

Nope .

Check your account details/scheme rules re: possible expiry, or call the helpline. Pretty sure most electronic vouchers are valid for a year, if not indefinitely.

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Does anyone know if there is a minimum time in which yu have to belong to the scheme? Could I sign up for vouchers one month before I begin maternity leave or do I have to be in the childcare voucher scheme for longer?

Even my employer (huge corporate with thousands of staff) don't publicise this.

BUT you need to check because the way your maternity pay is calculated is based on the income that NI is applied to. Therefore if you do vouchers by salary sacrifice your company could based your maternity pay on the money AFTER the salary sacrifice has been done.

After many conversations I have established that my company make up the difference so I don't lose out but you might want to check? It depends how long you have off whether the reduction to start is offset by the company paying for the vouchers at the end.

I think that is right that SMP is calculated on the NI contributable portion. But if you take that hit, and then continue to get the vouchers, you are better off than opting out of the scheme and having the amount you used to put into vouchers used to calculate your pay. I suppose maybe not if you make lods of money in salary. But, I would be better off with £243 per month, especially since my 90% only lasts for 6 weeks.

Strix, that is exactly the calculation i made - that the difference over 6 weeks to my SMP due to the reduction was far outweighed by (in my case) 7 months of receiving £243.

I think the scheme terms differ between providers, so you would need to check, but you can 'bank' the vouchers. My one has vouchers valid up to 18 months, but even then you can renew them.

Jojay thanks so much for this thread.

or as an alternative, rather than one or the other, I actually opted out of the scheme shortly before the 8 week 'average weekly earning' period and then opted back in straight after. I was surprised but my employers allowed this (perhaps they are unable prevent me doing so anyway?). My biggest worry was whether they would allow me to rejoin as of course if they didn't my plan would be scuppered! But they did.

This will give me the maximum SMP during the 6 weeks at 90%, of course together with the vouchers.

In answer to your previous question strix, I don't think there is a minimum time you have to be in the scheme (there certainly doesn't seem to be at my workplace) although I guess you should check the terms given when signing up (I did and there was no mention of mimimum term etc). I also called our childcare voucher provider although they were not that helpful, they wouldn't comment at all on this point.

good luck to all those trying to obtain this benefit - we really need to let more people know about it!

and I should also again say thank you to Jojay, just by sharing this knowledge I have gained approx £3,000 over the next 12 months!